The Swiss Market Index (SMI) has turned positive after cutting its morning losses. However, major companies like Nestlé, VAT, and Givaudan are experiencing declines, while ABB and Lonza are in demand. The euro is trading at CHF 0.9406 and the dollar at CHF 0.8665, with a slight rise in oil prices.
The Swiss stock market experienced a decline mid-week, with the SMI index falling 0.21% to 12,193.07 points amid investor caution ahead of the European Central Bank's interest rate decision. Major losses were seen in luxury goods and technology sectors, particularly for Swatch Group and Richemont, following disappointing figures from LVMH. In contrast, stocks like Autoneum and Julius Baer showed gains, while Tecan plummeted 15% due to a forecast cut.
The European Commission's proposal to delay the EU Deforestation Regulation by one year has sparked outrage, raising fears of a weakened commitment to combat deforestation. This landmark law, aimed at ensuring that products like cocoa and palm oil are deforestation-free, is crucial for protecting forests and Indigenous rights. The delay could result in the destruction of approximately 2,300 km² of forest, highlighting the urgent need for the EU to support affected countries and communities while maintaining the regulation's integrity.
The Swiss stock market opened lower on Thursday, influenced by a slowdown in consumer price inflation, which rose by 0.8% year-on-year in September. The leading SMI index fell by 0.20%, with 25 of the 30 major stocks declining, while Sandoz, Novartis, and Givaudan were among the few gainers. Analysts anticipate a potential rate cut by the Swiss National Bank in December 2024 due to declining inflation forecasts.
Nestlé's stock market struggles are affecting pension fund investors, as the company is a key component in many pillar 3a products, including UBS's Vitainvest and ZKB's Frankly range. These funds, heavily influenced by the Swiss Market Index, face challenges due to the uncertain outlook for major index players like Nestlé, Novartis, and Roche. Björn Eberhardt from Luzerner Kantonalbank warns that investors in index products may not see significant price gains under these conditions.
The SPI index in Zurich rose 0.33% to 15,946.16 points, with a market capitalization of 2.122 trillion euros. Notable gainers included Perrot Duval SA (+71.25%) and Relief Therapeutics (+9.87%), while Curatis (-21.03%) and Calida (-13.12%) were among the biggest losers. Nestlé led in trading volume with over 1.5 million shares exchanged.
Nestlé's recovery is bolstering the Swiss stock market as global markets react to the Fed's recent half-point rate cut, which has raised expectations for another cut in November. Analysts emphasize the Fed's intent to safeguard the labor market, with key inflation data and remarks from several Fed officials, including Chairman Jerome Powell, set to shape future monetary policy.
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